Capital III, Chapter 20 - Part 6

In these ancient societies, the merchant capital has an independent existence, because it has no connection, other than the cash nexus, with the producers whose products it acts as intermediary to exchange. And what it buys from them, at this stage, are products not commodities. That is, these are societies whose production is still almost entirely geared to the production of use values for direct consumption. The products bought by the merchants are merely the small quantity of surplus production. It is for this reason, as Marx says, that initially the basis of exchange of these products is haphazard.

The primitive commune or peasant community, and even the slave owner or oriental despot, knows the value of these products, determined by the labour-time required for their production, and how much of one, therefore, has to be given up to obtain a quantity of some other. But, they have no way of comparing this value to the products of some other community they may desire, or, therefore, how much gold or silver they should obtain in exchange.

Instead, the price revolves more around how much surplus product is available to be sold, and likewise the extent of demand for the products to be bought. It is only the merchant that can come to know these comparative values, and thereby establish exchange values for these products.

“The product becomes a commodity by way of commerce. It is commerce which here turns products into commodities, not the produced commodity which by its movements gives rise to commerce. Thus, capital appears here first as capital in the process of circulation. It is in the circulation process that money develops into capital. It is in circulation that products first develop as exchange-values, as commodities and as money.” (p 328)

The product of a slave in ancient Rome, has a value, determined by the labour required for its production, as much as another product produced by a primitive communist tribe, in Asia, or another product produced by a peasant producer in France. The value of each, resulting from the labour-time required for their production, irrespective of these vastly different modes of production, is equalised in exchange by the role of the merchant.

This may only be a very rough approximation to begin with, but, the more the trade develops, the more merchants are forced to compete against each other, to buy these products, the more the value of these products is brought into comparison with each other, and with money.

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